Love and Living Together: Steps to Maintain a Financially Harmonious Household

Ten out of ten financial editors agree: Whether you’re taking the first big step in your relationship or have been happily married for years, having the money talk with your significant other is awkward. But as uncomfortable as the conversation may be, it’s certainly an important one to have… which is precisely why I turned to the authority on all things love and money, Manisha Thakor.

As a women’s personal finance expert and a co-author of Get Financially Naked: How to Talk Money With Your Honey , Manisha knows a thing or two about love, living together, and financial intimacy. I sat down with her to learn the steps couples can take to navigate an important financial talk and achieve a financially harmonious household. Here’s what she recommends:

Step One: Invest in Your Relationship

Most of us aren’t encouraged to think about financial compatibility as a component of a healthy relationship, so don’t be hard on yourself if you haven’t talked finances just yet. Instead, think of the conversation as a long-term investment in your relationship, and start talking. Remember, the sooner you get started investing, the greater the potential for reward.

Step Two: Know Where You Both Stand Financially

Manisha explained that financial conversations with your significant other should have both an emotional component as well as a tactical component. For the emotional piece, it’s important to know what one another needs to be happy. She suggested thinking of a spectrum between security and freedom, explaining, “You might be more of a saver, requiring a high level of financial security, whereas your partner may value financial freedom and their ability to spend above all. Knowing where you both stand on that spectrum is crucial.” As for the tactical piece? Manisha recommends discussing your assets (what you own), your liabilities (what you owe), and your net worth (the difference between the two). In addition, talk openly about your net worth (the difference between how much you have and how much you spend) and your credit score.

Financial conversations with your significant other should have both an emotional component as well as a tactical component.

Step Three: Know When Is Right (and Minimize the Awkwardness)

According to Manisha, whether you’re moving in together or getting married, taking the next big step in your relationship is a natural trigger for having a conversation about money. But before you sit down to have the talk, remember you’ll be conversing in every aspect: the words you say, the tone you use, and the time of day you meet—there are so many factors. For many couples, it helps to set a date in advance, but others prefer an ambush strategy. Decide what’s right for you and your significant other and calmly have the conversation, keeping in mind that there are no right or wrong answers, but honest answers are critical.

Step Four: Recognize a Deal-Breaker When You Hear One

Learning of your partner’s rocky financial past doesn’t necessarily mean your relationship is doomed. If you’re both being honest, you can have an open, constructive conversation and decide the best way to proceed together. Where you could come pretty close to a deal-breaker, Manisha warns, is if your significant other is dishonest on a regular basis. At the same time, you should keep in mind that finances are a particularly uncomfortable topic, and it’s possible that your partner’s instinctive reaction may be to initially say something dishonest because they’re embarrassed. As long as the truth surfaces and you have honest conversations from there, you can get past that one dishonest statement. It’s the repeated dishonesty that signals troubles may lie ahead.

Step Five: Set Your Parameters and Stay on Track

While there’s no one set of questions that works in every situation, it’s a good idea to establish guidelines so you’ll both be able to walk away knowing who is responsible for managing which aspects of your finances. For example, you might want to decide:

• How will we handle money? Will we use joint accounts, separate accounts, or a combination of both?

• Who will pay for what? Will we share expenses equally or proportionally?

• Who is in charge of which tasks, such as paying bills, reviewing card purchases, and balancing the checking account?

Once you’ve set your parameters, decide how often you’re both comfortable checking in, and set a date. Just like you’d have a staff meeting at work, it’s important to have periodic household meetings to check in and get on the same page financially.

Step Six: Know How to Deal When Conflicts Arise

When conflict does arise, Manisha recommends reminding yourself that it’s normal. Most people don’t like conflict, but part of being in a relationship is experiencing some tension around money. Accepting that inevitability gives you the space you need to openly have the necessary conversations to rectify your disagreement.